SEC Filings

10-12G/A
AMSURG CORP filed this Form 10-12G/A on 05/21/1997
Entire Document
 
<PAGE>   101
 
                                  AMSURG CORP.
 
         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
10.  OTHER EVENTS SUBSEQUENT TO DECEMBER 31, 1996 (UNAUDITED)
 
     a. Acquisitions
 
          In March 1997, the Company acquired a majority interest in a physician
     practice-based surgery center. The purchase price paid for the interest
     acquired was $1,804,926 which consisted of cash of $1,443,942 and AmSurg
     common stock valued at $360,984. With these transactions, the Company
     acquired assets of $309,487, excess cost over net assets of purchased
     operations of $1,647,088 and assumed liabilities of $151,649.
 
     b. Long-Term Debt
 
          On April 15, 1997, the Company executed an amended and restated credit
     agreement with two lending institutions. Under the new agreement, the terms
     and conditions of the term loan (approximately $4.7 million at March 31,
     1997) remain unchanged. In addition, the credit agreement permits the
     Company to borrow up to $15,000,000 to finance AmSurg acquisitions and
     development projects. All borrowings under this agreement bear interest at
     prime or 1.75% above LIBOR or a combination thereof. The agreement provides
     for a fee of .35% on unused commitments and all outstanding borrowings are
     to be repaid April 15, 1999. The agreement contains covenants relating to
     the ratio of debt to net worth, operating performance and minimum net worth
     and prohibits the payment of dividends to common stockholders. Borrowings
     under the $15,000,000 credit agreement totaled $8,133,657 at March 31,
     1997.
 
     c. Impairment loss
 
   
          Impairment loss of $2,321,000 in the three month period ended March
     31, 1997 represents a charge in accordance with Statement of Financial
     Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived
     Assets and for Long-Lived Assets to Be Disposed of." The Company determined
     that an impairment in the asset carrying value at one of its partnerships
     that owns two surgery centers acquired in 1994 had taken place and as a
     result it recorded an impairment of asset carrying value associated with
     these centers. Various disagreements with the sole physician partner over
     the operation of these centers have adversely impacted the operations of
     these centers. After a series of discussions and attempts to resolve their
     differences occurring in March 1997, the Company concluded in April 1997
     that the partners could not resolve their disagreements and that as a
     result the carrying value of the assets associated with this partnership is
     not likely to be fully recovered. In determining that an impairment had
     occurred, the Company projected the undiscounted cash flows from these
     centers and determined these cash flows to be less than the carrying value
     of the long-lived assets attributable to this partnership. Accordingly an
     impairment loss equal to the excess of the carrying value of the long-lived
     assets over the present value of the estimated future cash flows was
     recorded. While there has been no final decision, the Company believes that
     the most probable outcome will be the discontinuance of its involvement
     with these centers. It is management's intent to pursue a course of
     resolution that is as economically favorable as possible to the Company.
     The revenues and the pretax loss after minority interest for these two
     centers for the three month period ended March 31, 1997, before
     consideration of this impairment loss, were $148,000 and $7,000,
     respectively.
    
 
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